Ryanair 737-800. By Rob Finlayson

Ireland-based low-cost carrier (LCC) Ryanair (FR) posted a €99 million ($ 121 million) net profit for the first quarter ended June 30, down 29% from €139 million year-over-year, largely due to a 27% rise in fuel costs.

First-quarter revenue increased 11% to €1.3 billion compared to €1.2 billion for the same period a year ago. Fuel amounted to 47% of total operating costs, FR said.

“Our 6% traffic growth combined with a 4% rise in average fares led to an 11% increase in revenues,” FR CEO Michael O’Leary said. “Ancillary sales grew by 15% to €286 million—outpacing traffic growth—accounting for 22% of total revenues.”

FR deputy CEO Howard Millar said in London Monday, “It seems once people make the travel decision, they’re prepared to spend [on ancillaries] .”

Excluding fuel, unit costs rose by just 3%, he said.

FR said it is 90% hedged for FY13 at $ 1,000 per tonne, a 21% increase on FY2012, and has hedged 50% of its FY2014 requirement at $ 940.

Millar said its Q1 2013 yields were dampened by the European Union-wide recession, together with heavily discounted fares from some of its new bases around the continent. New bases were producing high load factors, although some smaller ones were doing so at modest yields. It nevertheless planned to add “up to two” further bases this year, to add to its tally of 51.

FR said its outlook for FY13 remains cautious, with continuing austerity and restrained fare growth. Its full-year guidance for net profits remains in the €400-€440 range.